To get something sent to your computer you need an address with the current system being IPv4, at various points in time companies, educational establishments and governments have purchased large tracts of these addresses (your PC probably has one assigned from a pool every so often). In many cases who owns these addresses is known to anyone that cares to find out (
http://xkcd.com/195/ ).
Peerguardian is a blocklist for these addresses and certain other ones deemed to be unsavoury, the problem comes with any person can change their IP address at will (I probably did it 500 times already today) or gain an otherwise unknown address. Current methods only need people to be online for a few seconds to finger you for downloading stuff (which also brings us to how incredibly stupid some of the methods of "catching" downloaders* (again I have probably had 500 today and if I care to I can easily get untraceable stuff or just use one of the 30 unsecured or badly secured networks within falling down the stairs distance) are but that is a different matter).
There is something to be said for not being low hanging fruit but such things can just as easily be achieved using a hosts file (available on every operating system that matters and firewalls and most decent routers in one form or another).
How to fiddle with it:
http://www.mvps.org/winhelp2002/hostsfaq.htm
Some hosts to block
http://someonewhocares.org/hosts/
*step 1 find torrent file of your IP (or someone elses, it appears not to matter)
step 2 open torrent file and see who else is downloading (it is how the torrent protocol works after all)
step 3 if country of choice has acceptable legislation or loopholes (file a criminal case to get data, drop and use data for civil case) use these to match an IP to a name of account holder (note not necessarily the downloader) or file a "John Doe lawsuit" (user of 234.236.123.156 at 6pm GMT on 12/12/2009 you are hereby sued and once we get your name....).
step 4 get ISP or lawyer to send threatening letter usually with some offer of a fine instead of court.
step 5 rinse and repeat.